Netflix’s Subscriber Growth Is Good, but Engagement is Even Better

April 17, 2018
Posted in SVOD
April 17, 2018 Ricky Costa

Stranger Things

Netflix put the OTT industry on notice with its blockbuster earnings for Q1 2018. The platform’s subscriber base accelerated to 125 million subscribers worldwide, an increase of 7.41 million for the quarter, equating to 50% growth YoY. According to Quantum Stat’s estimates, as of Q1 2018, roughly 2 in 3 US adults currently subscribe to an OTT service.

Netflix Subscribers b

And it looks like the platform’s forward march into original content alongside their recent US price hike is paying dividends for consumers and investors. For the quarter, Netflix’s revenue grew 43% YoY finishing with $3.6 billion, the fastest pace in the history of the streaming business as result of a 25% increase in average paid streaming memberships.

Although Netflix’s subscription and revenue stories continue their great run; the platform’s engagement may be even scarier. According to TiVo’s Q4 2017 estimates, 93% of SVOD North American consumers watch content on a daily basis.  What is really really scary? OTT engagement has increased for those who watch content for 2-3 hours (+3.6% YoY), 3-4 hours (+5.4% YoY), 4-5 hours (+3.0% YoY) and 5 hours or more (+4.5% YoY).

A Feel Good Story… Sort of

Outside of SVOD, traditional TV networks haven’t given up on digital, especially when it comes to network mobile apps (ABC, CBS, Fox etc). According to TiVo, 30% of North American consumers have downloaded them on a streaming device such as a tablet/smartphone, and 79% use them weekly. More specifically, 26% of TV networks app users say they engage with them at least 7 days a week. Although the consumers who engage with TV network apps are loyal, the growth of TV networks app adoption has only seen 6% increase over the past 2 years.

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